Little faith in the House of Commons
I don’t want to be just a “gloomy Gus,” but when it comes to the United Kingdom, I have become very gloomy.
I have written many times over the past several years about the absence of leadership in the world today…but, when it comes to the United Kingdom…especially when we get to the subject of leadership…well…I really can’t think of anything positive to write.
I am not going to start in on Prime Minister Theresa May. I am going to start with David Cameron…then I will get to Ms. May.
Mr. Cameron was the Conservative Prime Minister of the United Kingdom from 2010 through to 2016.
Mr. Cameron was the Prime Minister who called for a referendum on whether or not the United Kingdom should remain in the European Union.
Moving on to Ms. May, who became the leader of the Conservative Party after Mr. Cameron resigned his leadership position upon the vote for the United Kingdom to leave the European Union…Brexit.
Ms. May started off badly and then things got worse. She thought she saw a time when she might improve the Conservative’s position in Parliament and so she called for another election.
Things have continued badly.
And then there is the leader of the Labour Party, Jeremy Corbyn.
Moving on, we come to Boris Johnson. Mr. Boris became the Foreign Secretary in Ms. May’s government, but resigned when he could no longer abide by Ms. May’s leadership of the effort to leave the European Union.
On July 18, 2018, Mr. Boris announced his resignation to the House of Commons, but continues to work in the shadows for his ideas about Brexit.
So, that is a quick view of how I view the leadership of the United Kingdom.
The future of the United Kingdom is, I believe, captured my movements in the value of the British Pound.
Just before the vote on Brexit, in the middle of June 2016, it took almost $1.47 to acquire one pound.
Mr. Cameron resigns soon after this and Ms. May became Prime Minister on July 13, 2016.
The value of the pound continued to decline and by the middle of October of that year, it took only about $1.23 to buy one pound.
Ms. May seemed to be trying to find her way as the Prime Minister in her first months in office, but decided in April of 2017 that she should call another election, one that would help her gain a firmer control in the House of Commons.
Unfortunately for Mr. May, the election held on June 8, 2017 resulted in a hung parliament and she only remained in power by cutting a deal with Northern Ireland’s Democratic Unionist Party.
From the bottom in the middle of October through till the election in early June, the value of the pound remained relatively steady. Just after the election it took $1.27 to acquire a pound.
Then, and Ms. May attempted to craft the arrangements of Brexit, the pound grew steadily stronger as traders seemed to give Ms. May the benefit of the doubt. By, December 4, a pound could be obtained for $1.33. But then in December 2017 through the end of January, the value of the pound really rose as confidence in Ms. May seemed to be growing. On January 28, it took $1.43 to buy a pound.
Then things began to unravel. The price was still around $1.43 on April 16, 2018, but then the decline took over. The steady fall has no placed the value of one pound at just under $1.29.
We are still not down to the value of October 2016, which was $1.23, but it is my feeling that this decline is going to continue and a value of $1.23 or lower is definitely possible.
There is a real possibility now that Ms. May will get to the date of disconnection without a deal. No leader in the United Kingdom seems to have the backing to actually craft a plan that would pass the House and be acceptable to the European Union.
The horror stories relating to an exit from the EU without a deal, are starting to pile up.
But, other stories are also beginning to be released. It is interesting what will happen, for example, in the arts if the connections between Great Britain and the European Union have no foundation. Then there is a concern about how schools and universities will fare under a no-deal exit. And, the worries grow.
To me, the decline in the value of the pound is a sign that the investment community has little or no confidence that Ms. May can pull things together and produce some coherent results in time.
This is why I believe that the value of the pound will continue to decline. Traders just do not believe that Ms. May can do the job.
But, could the Labour Party do any better? My reading here is that expecting Jeremy Corbyn to do any better that Ms. May is laughable.
What about Mr. Boris…or, BoJo, as some would call him?
Well, the thought of that is like smoking pot, something that Mr. Boris has claimed he did at an earlier time.
I suggest that if you want to keep an eye on how things are going on Brexit over the next several months leading up to the time the actual “leaving” is to take place, watch the value of the pound.
My faith in the British House of Commons right now is quite low. I don’t see anyone there that can accomplish what needs to get done. And, further calls to have another referendum, seem to be too late…and close to senseless.
Unfortunately, the United Kingdom is going to suffer for this…and, it is my belief that over time the biggest losers of the “leaving” will actually be the people that have been most in favor of leaving.